XRP Faces $60M Liquidation Risk from 4% Price Dip

As XRP continues to hover near a significant support level, traders are closely monitoring the potential risk of a forced liquidation cascade that could wipe out over $60 million in bullish positions across major exchanges.

Currently, XRP is priced at $2.12 based on CoinMarketCap data. Despite securing an 11.36% increase over the past month, market volatility may be just around the corner. According to the latest insights from Coinglass, a mere 4% drop in XRP’s value could initiate a massive liquidation wave, triggered if the token falls to approximately $2.063.

Leverage in crypto trading can multiply gains but also comes with risks. In the case of long positions—bets placed on the asset appreciating—a sudden price drop initiates what is known in trading as “forced liquidation.” This mechanism is triggered to limit risks for exchanges when traders fail to maintain sufficient margin levels. If XRP slips below the $2.063 threshold, nearly $64.24 million worth of leveraged long positions stand on the line.

Why $2.063 Is a Danger Zone for XRP Traders

Analysts identify the $1.90–$2.10 range as a high-density zone for long positions, with most of them clustering within this band. This concentration renders it a critical zone. When this price range is threatened, markets could experience rapid sell-offs due to cascading liquidations, which may push prices even lower before stabilizing.

This tactic is often linked to a phenomenon called a “liquidity sweep” or “stop hunt,” where market makers and large players drive the price to break key levels, forcibly closing out positions with tight stop-loss settings before prices rebound.

In the event of XRP dipping past this threshold, many traders with high leverage could lose their capital. Monitoring liquidation maps can help experienced traders navigate such zones and protect positions more effectively.

Key Exchanges in the Firing Line

Data shows that if XRP were to decline just 4%, Bybit, Binance, and OKX would bear the brunt of forced liquidations. Bybit, in particular, could see over $7 million in long positions vaporized at the $2.063 level. Binance and OKX follow with $3.39 million and $1.30 million respectively. This highlights the tight positioning by bullish traders across those platforms, emphasizing the importance of risk management at current levels.

Given these potential outcomes, analysts suggest that traders reassess their exposure and implement tighter stop-losses or reduce leverage to cushion against abrupt downturns. With the volatile nature of the crypto landscape, proactive risk mitigation is crucial to preserving capital.

Earlier this week, optimistic sentiment had started to return to the XRP market. Some bulls anticipated a rally following minor corrections, hinting at stronger support near the $2 range. However, with this looming threat of large-scale liquidations, sentiment may shift quickly if XRP breaches this crucial barrier.

XRP Just Saved $2 for Itself was another prior signal pointing to how vital this level is for momentum continuation. Failing to hold this region could signal a short-term trend reversal and amplify bearish pressures.

Related: Expert Advice: Sell XRP If You’re Confused

As always, crypto markets are inherently uncertain and price action can be disrupted by both technical triggers and macro factors. For XRP traders, maintaining awareness of market liquidity zones and applying thoughtful strategies may offer an edge in navigating the potential storm ahead.